Husband and wife funded a JRT in June of 2018 in a non-community property state (Oregon). Husband died in January 2019. Trust document has no general power of appointment, trust income is to be distributed at least monthly, and either Trustee/Grantor has the right to revoke the trust. Trust document is silent regarding separate shares and has no memorandum instructing to keep separate shares. Property funded to the trust included real estate owned jointly, bank accounts and appreciated securities owned by the wife. All separate assets were retitled into the JRT name.
Absent of separate share accounting, can it be assumed that estate equalization occurred prior to the trust funding and each grantor owned a 50% fractional share of all the trust assets? On the husband's death, wouldn't his 50% fractional share of the JRT become irrevocable and included in his estate?
I would like to confirm my understanding that if considered an “ Estate Equalization JRT”, the appreciated property considered gifted by the wife on the trust funding would not be eligible for a step up in basis under IRC 1014(e) on the husband’s death. However, wouldn't the husband’s share of jointly owned real estate get a step up in basis?